New geothermal capacity contributes largely to increased annual profits for KenGen
KenGen reports records higher profits for the financial year ended June 2020 largely attributed to the new 165 MW Olkaria V geothermal power plant and income from geothermal service business. The focus for 2021 is now to deliver the 83.3 MW Olkaria I Unit 6 geothermal power plant.
In the release on its Annual Report for the financial year ended June 2020, Kenya Electricity Generating Company (KenGen), has announced a Ksh.13.9 billion ($125 million) profit before tax for the financial year ended June 2020. This translates to 8.3% growth in profit from the previous financial year where the company announced Ksh 11.6 billion profit before tax.
The increase was mainly attributed to the additional revenue contribution by the 165 MW Olkaria V geothermal power plant and proceeds from the ongoing geothermal drilling project in Ethiopia.
“We reported a 13.4% growth in electricity revenue, mainly due to the full operationalization of the 165 MW Olkaria V geothermal power plant in November 2019, which boosted geothermal production by 14%,” the Managing Director & CEO, Mrs. Rebecca Miano, said.
Consequently, the Board has recommended a first and final dividend for the year of Ksh.0.30 per ordinary share of Ksh.2.50. This will be presented during the company’s upcoming Annual General Meeting (AGM) for approval. Recently, the company made a dividend payout of Kshs 1.65 billion to its shareholders.
At the same time, KenGen’s profit after tax improved from Ksh.7.88 billion to Ksh.18.4 billion, an increase that the company attributes to a Kshs 8.1 billion reduction in corporate tax rate from 30% to 25% as per the Government’s relief measures to support companies navigate through the COVID-19 crisis. “We appreciate the support provided by the Government during this unprecedented time to enable us to continue providing electricity as an essential service,” said KenGen’s Managing Director and CEO, Mrs. Rebecca Miano.
She further indicated that in as much as the country’s hydrological conditions were favourable with dams recording full capacity, hydropower production declined by 2% following constrained demand associated with the effects of COVID-19 pandemic on electricity consumption.
Mrs. Miano stated that in response to the pandemic, KenGen continued to implement business continuity measures to minimize the impact of the pandemic on operations to ensure continued generation of electricity.
During the year ended June 2020, KenGen’s operating expenses were at Ksh.14 billion compared to Ksh.13.9 billion in the previous year. “We continue to optimize operating costs by leveraging on digital transformation,” Mrs. Miano added.
Mrs. Miano said the company would also continue implementing its Corporate Strategy to ensure sustainable power growth in the country, while leveraging on innovation and partnerships for continued business growth and diversification.
“In the year ahead, we aim to deliver Olkaria I Unit 6 geothermal power plant, which will add 83.3MW to the national grid, and continue with our diversification strategy focusing on consultancies, operations and maintenance services, training, and the operationalization of materials testing laboratory and electronic instruments calibration center,” the CEO said.
Source: company release